No One Can Beat The iPhone

The best part about Apple's
blowout earnings report Tuesday was how the iPhone business
continues to counteract every theory Apple doubters have had over
the years.

At first, those doubters said Apple was doomed because it refused
to make a "cheap" iPhone to compete with all those
budget-friendly Android phones that eventually helped Google snap
up a good 80% or more of the global smartphone market.

The theory went that unless Apple made a cheaper phone, Google
would take over the world and developers would flock to the
platform and start making the best apps for Android instead of
iPhone.

Wrong.

Developers
still make more money on iOS than they do on Android, even
though Android runs on millions more devices than iOS. And the
best, new apps still tend to launch on iPhone first. Android,
despite its massive market share, is still an afterthought for
most developers. Plus, iPhone sales continued to grow even after
Apple released the iPhone 5C, which many thought was too
expensive at $549 and spelled certain doom for the company.

Now the prevailing theory is that Apple is hosed in emerging
markets where manufacturers like Xiaomi have figured out how to
make Android phones just as beautiful and powerful as the iPhone,
but cost half as much. The new theory goes that Apple will take a
hit in emerging markets like China because people will prefer to
buy those high-quality, cheaper phones instead of the pricey
iPhones.

That means people passed up the cheap, attractive Xiaomi phones
in favor of the iPhone, which can cost at least $400 more than a
comparable Xiaomi device.

What the Apple doubters don't seem to realize is that even though
some Android phones are
getting really good, they don't offer a unique experience.
Xiaomi, Samsung, LG, Motorola — phones from those companies can
do all the same stuff. The only difference between them are price
and design. And if someone wants an Android phone, they go for
the cheapest model with the best specs. Lately, Xiaomi has been
the only company to fit that mold.

But Apple is different. The iPhone continues to be a roaring
success because it offers unique experiences you simply can't get
from the dozens (100+?) of Android devices that launch each year.

A lot of people like to scoff at the so-called "incremental"
innovations Apple adds to the iPhone each year, but over time,
those tiny innovations add up to big things. At first, Touch ID
only let you unlock your phone with a fingerprint. Now, it lets
you log into apps and make payments with Apple Pay.

Apple Pay is in its infancy, but we're already seeing it being
adopted much quicker than any other rival mobile payments
platform. Plus, the NFC chip in the iPhone 6 that makes Apple Pay
possible can eventually be opened up to let you do stuff like
enter your hotel room with a wave of your phone or enter the
subway with a tap.

And so on...

Android phone makers haven't been able to nail the kind of
innovation that sticks like Apple has. Google Wallet was a bust.
NFC is still a gimmick on most Android phones. The apps are
simply worse than their iOS counterparts. And there are lots of
wild hardware concepts like curved
screens and bodies
that are guaranteed to never really take off.

If anyone is in trouble in these emerging markets, it's companies
like Samsung that still rely on expensive Android phones for a
good chunk of their profits. There's very little difference
between what you get from a Samsung phone versus a Xiaomi phone,
and Samsung still hasn't proven it can develop unique experiences
for its devices to justify the greater cost like Apple can.